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23 May 2022, 07:30
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Be sure to select an answer first to save it in the Error Log before revealing the correct answer (OA)!
Difficulty:
35%
(medium)
Question Stats:
71% (02:16) correct
29%
(02:26)
wrong
based on 83
sessions
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Bamboo is a chain of American stores selling Bamboo sprouts, Mushrooms and other Chinese food ingredients. In USA, Bamboo sprouts' retail prices are set by importers, and the retailer's share is 19 percent. Since Bamboo's margin on home-grown Mushrooms is much higher, the chain's management plans to devote more of its stores' shelf space to Mushrooms and reduce the Bamboo inventory that the stores carry.
Which of the following, if true, most strongly argues that the plan, if put into effect, will not increase Bamboo's profits?
A. Recently Bamboo importers, seeking to increase share in competitive sectors of the market, have been competitively cutting the retail prices of some of the best quality Bamboo sprouts.
B. In market research surveys, few consumers identify Bamboo as a Mushroom store but many recognize and value the broad range of Bamboo Sprouts it carries.
C. The Importer's share of the retail price is 50 percent, and they also retain all of the excess revenue due to the occasional sharp price fluctuations.
D. Consumers who buy Bamboo Sprouts from direct sales stores generally pay less per than they would if they bought them through a retail outlet such as Bamboo.
E. Some of Bamboo's locations are in small towns and represent the only retail outlet for Mushrooms within the community.
Which of the following, if true, most strongly argues that the plan, if put into effect, will not increase Bamboo's profits?
A. Recently Bamboo importers, seeking to increase share in competitive sectors of the market, have been competitively cutting the retail prices of some of the best quality Bamboo sprouts.
B. In market research surveys, few consumers identify Bamboo as a Mushroom store but many recognize and value the broad range of Bamboo Sprouts it carries.
C. The Importer's share of the retail price is 50 percent, and they also retain all of the excess revenue due to the occasional sharp price fluctuations.
D. Consumers who buy Bamboo Sprouts from direct sales stores generally pay less per than they would if they bought them through a retail outlet such as Bamboo.
E. Some of Bamboo's locations are in small towns and represent the only retail outlet for Mushrooms within the community.
04 Jun 2022, 12:28
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Bunuel
Question type: Weaken plan
Plan: increase profits by decreasing bamboo space in favor of more mushroom space
Premises: mushroom margins are higher
We are likely to need something that explains why giving more space to mushrooms won't improve profits.
Let's look at the answer choices:
A. Recently Bamboo importers, seeking to increase share in competitive sectors of the market, have been competitively cutting the retail prices of some of the best quality Bamboo sprouts.
This would not impact whether we should give more space to mushrooms. Eliminate.
B. In market research surveys, few consumers identify Bamboo as a Mushroom store but many recognize and value the broad range of Bamboo Sprouts it carries.
If mushroom margins are higher but not many people know we even sell mushrooms, and we take away selections from the product for which we're well-known, sprouts, that's not likely to work out well. Keep it.
C. The Importer's share of the retail price is 50 percent, and they also retain all of the excess revenue due to the occasional sharp price fluctuations.
We are told that mushroom margins are higher, and this doesn't explain why we wouldn't want to give more space to mushrooms. Eliminate.
D. Consumers who buy Bamboo Sprouts from direct sales stores generally pay less per than they would if they bought them through a retail outlet such as Bamboo.
We are concerned with a plan to change something in our store, not what happens elsewhere and hasn't changed. Eliminate.
E. Some of Bamboo's locations are in small towns and represent the only retail outlet for Mushrooms within the community.
If Bamboo was already the only place to get mushrooms, everyone who needed mushrooms was already our customer, so giving more space to mushrooms wouldn't help, BUT the answer choice has the word "some." That doesn't mean that we wouldn't benefit by making the change in other stores. Eliminate.[/quote]
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